Foreign Foreign Judgments and Judicial Review

MJIL Staff Member

There are judgments awarded by a court in another country: foreign judgments. There are judgments awarded by another U.S. state: also foreign judgments. There are also judgments awarded by a court in another country, recognized in one U.S. state, seeking enforcement in a second U.S. state: foreign foreign judgments. In 2014, there was an instance of a foreign foreign judgment, Standard Chartered Bank v. Ahmad Al Gosaibi & Brothers Co.[1]

$25 million dollars was missing. A currency exchange contract had gone bad. Standard Chartered Bank was expecting $25 million from Ahmad Hamad Al Gosaibi and Brothers Company because of a currency contract between the two entities. Standard pursued AHAG in Bahrain and received a favorable judgment from a Bahraini Tribunal. Then, Standard brought the Bahrain judgment to New York and the state court recognized the $25 million dollar judgment.[2] The plaintiff, Standard, then took the recognized New York judgment to state courts in Washington D.C. and Pennsylvania at about the same time. The Washington D.C. appellate court was unconvinced that the judgment was entitled to full faith and credit and found that the New York judgment could not be registered with the Clerk of Courts for enforcement because this foreign judgment would not be recognized in Washington D.C. (because New York lacked personal jurisdiction over the defendant).[3] The Pennsylvania Court held that the New York judgment was entitled to full faith and credit and therefore the judgment was enforceable.[4]

An interesting aspect of the incongruity of the state court judgments is that presumably the Washington D.C. holding was not challenged because the plaintiff was able to receive a favorable holding in another state.

The concern of recognition and enforcement being litigated separately is an issue that will continue to grow if there are not uniform recognition laws in place in each state. In fact, John Coyle found that from 2008-2012 there were 99 enforcement actions.[5] It is possible that the judicial system is on the precipice of the foreign foreign judgment being used frequently as a litigation tool to gain an advantage.

[5] John F. Coyle, Rethinking Judgment Reciprocity 92 N.C. L. Rev 1109, 1154–1155 (2014). (“This dataset was drawn from (1) federal complaints filed from 2008 and 2012 in which a judgment creditor sought to enforce a foreign judgment in federal court, (2) reported federal cases between 2008 and 2012 in which a judgment creditor sought to enforce a foreign judgment in federal court, and (3) reported state cases between 2008 and 2012 in which a judgment creditor sought to enforce a foreign judgment in a state court.”)